World equities, bond yields rise after Fed meeting By Reuters


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© Reuters. FILE PHOTO: People wearing protective masks in the middle of the outbreak of coronavirus disease (COVID-19) are reflected on an electronic board showing Japan’s stock prices outside a brokerage house in Tokyo, Japan, October 5, 2021. REUTERS / Kim Kyung-Hoon

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By Elizabeth Dilts Marshall

NEW YORK (Reuters) – Global equities and bond yields rose on Wednesday after the US Federal Reserve said it would close its bond purchases from the pandemic in March and begin raising interest rates as much as three times next year.

The new economic projections predict inflation of 2.6% next year compared to the 2.2% projected in September, and unemployment will fall to 3.5%.

“The economy no longer needs increasing amounts of political support,” Fed Chairman Jerome Powell said at a news conference after the meeting.

MSCI’s global equities benchmark rose 0.10% and the pan-European index rose 0.26% on the news.

It scored 75.48 points, or 1.63%, to end at 4,708.37 points, while it scored 330.94 points or 2.17% at 15,568.58. It rose 390.19 points, or 1.10%, to 35,934.37.

“The Fed did not throw any basket balls,” said Ryan Detrick, chief marketing officer at LPL Financial (NASDAQ :). “The market seems to be taking things in stride. It did not surprise anyone.”

The two-year US government bond yield, which typically moves in line with interest rate expectations, rose 3.8 basis points to 0.697 per cent.

The yield on 2.4 basis points rose to 1.463% and the 30-year government bond yield rose 3 basis points to 1.849%.

Falling 0.227%, with the euro rising 0.31% to $ 1.1292. was at $ 1,779 an ounce.

Inflation is also a problem elsewhere, with UK consumer price inflation rising to its highest in more than 10 years in November to 5.1%, exceeding all forecasts from economists ahead of a Bank of England interest rate meeting on Thursday.

Investors sharply increased their stakes that the BoE is raising interest rates.

The European Central Bank will meet on Thursday and is expected to turn the stimulus back another notch, but will promise ample support for next year, sticking to its long-standing stance that alarmingly high inflation will subside on its own.

Oil prices rose on Wednesday and rose again from early losses after U.S. inventory data showed strong consumer demand and when the Federal Reserve signaled that the economy is recovering.[O/R]

But settled up 0.20% to $ 70.87 per barrel and settled 0.24% to $ 73.88 per barrel.

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